Revised Presentation in the Consolidated Statements

The Company both rents and sells medical equipment. In the first quarter of 2013, it came to management’s attention that based on promulgation through recent comments from the Staff of the Securities and Exchange Commission greater clarity and consistent classification should be provided in an entity’s financial statements around such assets on the balance sheet and in the statement of cash flows. Specifically, the Staff believed that a company should clearly disclose (i) assets on the balance sheet; and (ii) cash flows when presenting cash flows in relation to, and in consideration of, its predominant source of revenues.

Management believes that the predominant source of revenues and cash flows from this medical equipment is from rentals and that most equipment that the Company has purchased is likely to be rented prior to being sold. The Company first revised its presentation of revenue and cash flows in its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2013 and continues the revised presentation in this report.

While management has concluded that the effect of correcting previous errors in the Company’s financial statements is not material, the Company reclassified certain amounts in its Condensed Consolidated Cash Flows for the six months ended June 30, 2012 to allow for appropriate comparisons between periods presented.

The effect of this reclassification to the Condensed Consolidated Cash Flow Statement was to both reduce Net cash provided by operating activities and reduce Net cash used in investing activities by $1.4 million for the six months ended June 30, 2012.

The corrections and reclassifications described above did not affect the Company’s condensed consolidated statements of operations or total cash flows for the six months ended June 30, 2012.